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A Short Chart Commentary

With all the revisions to the UrbanSurvival website, I can now post comments a lot easier and so every once in a while I’ll post charts like the one below. First, however, let me explain what this chart is and why I developed it.

The stock market goes up, the stock market comes down. Most non-professionals don’t pay a lot of attention to which index they look at. If you hear “The Dow is up!” most folks assume that if the Dow is up, everything must be peachy. Well, that ain’t the case.

What a lot of people gloss over is the size of the Internet Bubble collapse and its impact on long-term investment performance. The way I figured it, if Dow Jones & Company could pick and choose 30-stocks to make up their Industrial average, why couldn’t I take three indices and add them up and come up with something which would be an “index of indexes” and thus, get a little keener insight into the big game?

So that’s where this chart came from: I assume equal dollars were placed into the Dow Industrials, the NASDAQ Composite, and the S&P 500 at the beginning of the year 2000. So much for the foreplay…here’s what my “truth detector” chart looks like:

What this Chart Means

Putting on the cap and gown (which looks silly, but go with me on this) The People’s Economist steps up to the white board and writes in perfect script:

1. The chart means there is something of a Double Top now.

2. This chart is NOT inflation adjusted.

3. If the chart WERE inflation adjusted, the Aggregate would need to be at 17,753 and change.

*** Think about what this means!!! ***

Peace…. the People’s Economist

My, this is some sobering stuff to ponder, ain’t it?

Well, enough for now…besides: this gown is getting hot and there’s folks beginning to point as they drive by the ranch…which is odd because we’re on a dead-end road.

Apparently, these Sunday drivers have never seen a begowned academic semi-pro finance/marketing/IT geek standing in the middle of a half-mowed field under a tree with two cats as an audience and writing on a white board drawing on a roll-around whiteboard pulled by a tractor and lying out economics with such fluid grace before.